Q3 2014 investor presentation

1. 23 October 2014
Transcom
Third quarter 2014 results presentation
Johan Eriksson, President & CEO
Pär Christiansen, CFO OutstandingCustomerExperience

2. Transcom at a glance
1

3. 3
•A global customer experience specialist...
•...providing outsourced customer care, sales, technical support, and collections services...
•...through an extensive network of contact centers and work-at-home agents
Transcom’s business is to help make sure that our clients’ customers form positive perceptions of their interactions with them.
”
What is Transcom?

4. 4
Transcom in numbers
•29,000 people…
•…representing more than 100 nationalities
•54 contact centers, onshore, off-shore and near shore…
•…in 23 countries
•Delivering services in 33 languages...
•...to over 400 clients in various industry verticals
•€653.2 million revenue in 2013
•Market cap: SEK 1,338.9 million as at September 30, 2014. Listed on Nasdaq Stockholm (TWW SDB B and TWW SDB A)

5. A global player serving clients in many industries
5
North Europe
Iberia & Latam
North America & Asia Pacific
Central & South
Europe
CMS
33%
24%
21%
21%
1%
Communi-
cations
Financial Services
Retail
Public Sector
Services
61%
14%
6%
4%
7%
4%
Healthcare
3%
Other
Business mix
By region
By industry

6. We have an extensive global footprint
6
Country
Domestic
Near shore
Offshore
Sweden
✓
✓
Norway
✓
Denmark
✓
Netherlands
✓
Estonia
✓
✓
Lithuania
✓
✓
Latvia
✓
✓
Germany
✓
United Kingdom
✓
Italy
✓
Hungary
✓
✓
Poland
✓
✓
Croatia
✓
✓
Serbia
✓
Tunisia
✓
Spain
✓
Portugal
✓
Chile
✓
Peru
✓
✓
Colombia
✓
USA
✓
Canada
✓
✓
Philippines
✓
✓
•Domestic markets – service delivery from the customer’s country
•Near shore – service delivery to countries in the vicinity
•Offshore – service delivery to countries far away

7. Update on important activities
•Divestment of credit management services business complete – focus on core customer care business
•Expansion in Eastern Europe for domestic business (new sites in Szeged and Belgrade)
•Establishment of Gdansk as a multilingual site
•Entry into Colombia
•Several new client acquisitions with global potential
•Focus on expanding onshore volumes in the United States
•Launch of a research and innovation program with the objective of developing:
-New technological solutions and tools
-New operating models and processes
•Launch of “Transcom Cares” as the company’s overarching Corporate Social Responsibility (CSR) governance program
•Re-domiciliation to Sweden from Luxembourg
7

8. Our performance in Q3 2014
2

9. 9
• Efficiency
improvements and
continuous focus on
underperforming areas
• Targeted sales efforts
- Growth with existing
clients in new
geographies
- Broadening client base
Positive progress on turnaround
We are focusing on enhancing Transcom’s performance
* Excluding non-recurring items.
599.2
631.8
560.2
589.1
554.1
605.6
653.2
2007 2008 2009 2010 2011 2012 2013
6.0%
4.4%
2.2%
0.7%
1.5%
2.7%
4.3%
Revenue (€m)
Operating margin*
3.1%
1FHi r2s0t1 4 Sept
2014
YTD
3.3%

10. Four-fifths of the revenue decrease in Q3 2014 is explained by divestments and currency impact
52.3
48.2
34.7
35.1
31.4
30.4
29.4
31.0
8.2
1.4
Q3 2013
Q3 2014
10
Central & South Europe
Iberia & Latam
North America & Asia Pacific
North Europe
Change
-7.8%
CMS
Net revenue, Q3 2014 vs. Q3 2013
€m
+1.2%
-3.2%
+5.4%
-82.9%
146.0
156.0
•Revenue impacted by CMS divestments completed in order to focus on the core CRM business in prioritized geographies (€-6.8m)
•Negative currency impact: €-1.1m

11. Q3 2013
Q3 2014
Excluding divested operations and currency effects, revenue decreased by 1.4% on a like-for-like basis
11
146.0
148.1*
Net revenue, Q3 2014 vs. Q3 2013 on a like-for-like basis €m
-1.4%
* Like-for-like revenue in Q3 2013 adjusted for currency effects (€-1.1m) and a number of CMS divestments (€-6.8m)
€2.1m like-for-like revenue decrease mainly due to lower volumes in Iberia & Latam and North Europe

12. EBIT Q3 2013
One-off items 2013
One-off items 2014
Cost savings programs
Volume & efficiency
Expansion costs
Other
EBIT Q3 2014
EBIT margin in core CRM business improved to 3.5% (2.6% in Q3 2013)
12
3.9
0.0
0.0
-1.3
-0.6
+3.5
EBIT, core CRM business
Q3 2013 vs. Q3 2014
-0.4
5.1
•Improvement mainly driven by the North America & Asia Pacific and North Europe regions

13. EBIT Q3 2013
One-off items 2013
CMS divestment
Cost savings programs
Volume & efficiency
Expansion costs
Other
EBIT Q3 2014
EBIT margin including CMS improved to 3.6% (2.9% in Q3 2013)
13
4.6
0.0
-1.3
-0.6
+3.5
EBIT, Transcom Group Q3 2013 vs. Q3 2014
•Improvement mainly driven by the North America & Asia Pacific and North Europe regions
-0.4
5.3
-0.5

14. EBIT margin increase mainly driven by improvements in the North Europe and North America & Asia Pacific regions
14
•North Europe: Improved performance in Sweden, Norway and the Netherlands, as well as divestment of loss-making Danish CRM unit
•Central & South Europe: Increased profitability in Germany and Poland. Investments in new sites in Hungary and Serbia had a counterbalancing effect.
•Iberia & Latam: Lower volumes and efficiency in Chile, and lower volumes in Spain
•North America & Asia Pacific: Increased efficiency and cost reductions. North American operations now profitable.
•CMS: Strategic review completed. All units sold or integrated with core CRM business.
2014
Jul-Sep
2013 Jul-Sep
EBIT margin
North Europe
Central & South Europe
Iberia & Latam
North America & AP
CRM*
CMS
Total
5.0%
2.3%
0.9%
5.2%
3.5%
13.0%
3.6%
3.2%
2.1%
2.7%
2.1%
2.6%
8.2%
2.9%

15. Key priorities in 2014
15
Increase onshore seat utilization in North America
•Increase focus and accountability
•Focus on creating opportunities for profitable growth, also expanding onshore footprint Improve operational performance in the North Europe region
•We have ended a number of unprofitable client contracts
•Greater financial predictability through the implementation of a new agreement with one of our largest clients Improve operational performance in Latin America
•Address decreasing seat utilization and unsatisfactory efficiency levels in Chile
•Presence in Colombia will support strategy to expand in fast-growing Latin American markets

16. What will it take for Transcom to return to historical margins?
16
Key performance driver Trend vs. Q3
2013
Q3 2014 vs. Q3 2013
Average Seat Utilization
ratio
88% vs. 86%
Share of revenue generated
offshore
22.5% vs. 19%
Average Efficiency ratio
(billable over worked hours)
n/a – positive development
Monthly staff attrition n/a – flat
Improvements on four KPIs vs. previous year
Continue improving key performance indicators
• Seat utilization
• Efficiency
• Offshore/onshore split
• Attrition

17. 17
75.9
80.7
86.3
91.1
94.6
94.4
90.1
85.7
67.0
32.1
38.1
59.3
56.7
49.7
36.2
55.3
54.3
38.4
0.00
0.50
1.00
1.50
2.00
2.50
3.00
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
Q312
Q412
Q113
Q213
Q313
Q413
Q114
Q214
Q314
Gross debt (€ m)
Net debt (€ m)
Net debt/EBITDA
•Gross debt decreased by €18.7 million compared to the Q214 level
•Net Debt decreased by €15.9m compared to the Q214 level
•Net Debt/EBITDA ratio: 1.70 (2.30 in Q214)
•Financial cost €0.4m (€0.6m in Q214)
Debt & leveraging

18. 3
Going forward – Transcom’s strategic direction

19. 19
Transcom’s brand promise
Outstanding Customer Experience, driving revenue and brand loyalty
”

20. 20
North America and Asia Pacific
•Continue expanding in local markets in Asia Pacific
•Expand onshore volumes in North America Latin America
•Serving domestic markets and the US, in addition to Spanish clients North Europe
•Leverage strong position in home market Central Europe
•Primarily near shore opportunities
•Strong capability in expanding Eastern European markets
Growth opportunities

21. Stay up-to-date on Transcom
21
www.transcom.com
blog.transcom.com
LinkedIn

22. Thank you! Questions?